Regenold v. RELX Inc.

Background

Todd Regenold worked for RELX, Inc., through its subsidiary Lex Machina, as Vice President of Sales and Customer Success for more than five years. In March 2022, he was told that his position would be eliminated effective one month later. RELX sent him a severance letter offering 26 weeks of severance, totaling $167,683.50, paid in biweekly installments through September 2022, along with six months of paid membership in an executive outplacement service.

Shortly before Regenold’s final day, RELX told him that he was under investigation for alleged misconduct. After he cooperated with the investigation, RELX informed him that he would not receive the severance package because he was not an employee in good standing.

Regenold sued RELX in San Mateo Superior Court, asserting breach of contract and related state-law claims. RELX removed the case to federal court, arguing that the claims were completely preempted by the Employee Retirement Income Security Act of 1974, or ERISA, because the severance benefits were offered and withheld under the RELX US Severance Plan.

Motions and arguments

RELX moved to dismiss. It argued that Regenold’s state-law claims were completely preempted by ERISA and that, if the complaint were treated as an ERISA claim for benefits, dismissal was required because Regenold had not exhausted the Plan’s administrative remedies. Regenold opposed dismissal and moved to remand the case to state court. He argued that the promised benefits did not require the ongoing administrative scheme necessary for ERISA coverage.

The opinion states that Regenold did not dispute that the severance offer was made under the Plan. It also states that he effectively conceded that, if ERISA governed the Plan, remand would fail and RELX’s motion to dismiss would be properly granted.

Court’s analysis

The court applied the test asking whether administering the benefits required an ongoing administrative scheme. Although Regenold’s termination involved a one-time decision concerning one person, the court focused on the Plan itself.

The Plan described itself as an employee welfare benefit plan under ERISA and a severance pay plan under Department of Labor regulations. A committee of at least three people appointed by RELX’s board decided claims, and the Plan gave that committee complete discretion over claims decisions. The Plan also contained a detailed procedure for submitting written claims and challenging benefit denials. If a claim was denied, the procedure required notice of the claimant’s right to bring a civil action under ERISA.

The Plan had been in effect since 2014 and applied to hundreds of employees of RELX and its affiliates. The court concluded that the Plan was plainly an ongoing administrative scheme and that ERISA governed it.

Disposition

The court denied the motion to remand and granted the motion to dismiss. It concluded that leave to amend was not appropriate because additional factual allegations could not avoid ERISA preemption and Regenold could not truthfully plead that he had exhausted the Plan’s administrative remedies at that time.

The dismissal was without prejudice to any right Regenold might have to bring a new action after exhausting the administrative remedies. The opinion states that the motions were decided without oral argument. The order was signed by Chief United States District Judge Richard Seeborg on November 21, 2022.